Generalist Approach

EMJ Capital believes that over time, a Generalist Approach to tech hedge funds has several advantages over a Specialist Approach. Many hedge fund companies build a firm using a Specialist Approach – silo’ed niche analysts who cover companies/sub-sectors and manage risk over performance. EMJ utilizes a Generalist Approach with a team of inter-disciplinary, collaborative data scientists who manage for performance despite risks.

Generalists Win in a Specialized World – ESPN

David Epstein, Author of “Range” spoke with Pablo Torre on ESPN in March 2021, to discuss the science, history, and habits behind the world’s top athletes. Specializing in a particular sport, Epstein states, does not lead to better performance – the Generalist Approach does.

Learn more about the Generalist Approach and EMJ Capital.

Listen to the ESPN podcast here.

A Generalist Approach Beats a Specialist Approach Over Time

  • Better and more creative ideas → Alpha
  • Real life operational experience has led to better, more knowledgeable tech contacts which in turn lead to better ideas → Alpha
  • We don’t look for data science solutions under the lamplight → Alpha
  • Focused on the earlier part of the growth curve than a bigger more diversified tech portfolio – more wood behind the best ideas → Alpha

EMJ Capital – Operational Approach

  • Typically more concentrated positions
  • Longer hold times – often several years
  • Seeking alpha via unusual company ideas
  • Willingness to ride out periods of market volatility
  • Data science prioritized
  • Interdisciplinary backgrounds – analysts that debate ideas
  • Team collaboration
  • Look for best ideas

EMJ Capital – Generalist Approach

  • Data scientists before Analysts
  • Inter-disciplinary backgrounds over silo’ed niche backgrounds
  • Collaboration, debate, ideas not lamplight solutions
  • Managing for performance despite risks rather than managing for risk over performance

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